Florin, When I run into the local area of my largest base, my computer does indeed lag. Jerky movement, rubberbanding kind of thing, until the base finishes drawing. This is after the improvements they made for building performance on testlive. It was much worse before those improvements.
When FPS drops enough, that in itself is lag.
For decay, having hitpoints drop is one way to handle it. I have to say though… it is a painful thing to keep up on, if every building piece has it’s own individual decay. If all connected pieces had a collective “structure HP”, which could be maintained, that would work better. Otherwise, you have many hidden pieces you could never repair.
My other game: Wurm Online. Back in the day, we used to have to repair each building piece. It was maddening. Now we have these deeded chunks of land that we pay for, based on the size of the land we claim. You pay ingame coins to keep the deed current. If you fail to pay, all of your buildings and stuff on that land starts to decay… If you catch it in time, before the deed expires, you can pay the deed fees, then run around repairing every wall, floor, ceiling, etc.
The ingame coin cost is hard to maintain without buying coins with real life cash. It is possible, but you have to really grind to make it work. We generally just consider it our monthly dues to play the game.
People that want really big bases and lots of them end up helping to fund the game’s future development 
Not saying I want pay deeds here. Just describing that other game a bit for context, since I reference it frequently.
In that game, there are 4 things that really impact performance, in order of severity, from most to least:
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How many player characters group up in a local region, generally for major events, like a world boss hunt. When we hit 100+, it gets really rough on older computers, but most new gaming rigs power through it on decent level graphics settings.
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Lighting. When someone places hundreds of dynamic light sources around their deed, it will bring your client to it’s knees, if you don’t use a setting int he client to limit the number of dynamic lights it will render.
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Building objects
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Animals. We can capture and breed virtually every animal in the game. Having hundreds clustered together in a small area makes an impact, but not as bad as the above.
I know they are two different games and on vastly different game engines (Java vs UE4), but having experienced things in Wurm that were rough on performance just leads me to try avoiding some of the same things here. We probably just have to go through all the same struggles as a way for the devs to learn what works best here. But one thing that was very evident there was that constant poor performance was killing the player base.
Wurm is the game Notch co-developed, before leaving to go create Minecraft.
